Teamsters Canada Rail Conference v Canadian Pacific Railway Company, 2023 ABKB 620

Court of King’s Bench of Alberta Citation: Teamsters Canada Rail Conference v Canadian Pacific Railway Company, 2023 ABKB 620 Date: 20231106 Docket: 2201 04715 Registry: Calgary Between: Teamsters Canada Rail Conference Applicant - and - Canadian Pacific Railway Company Respondent _______________________________________________________ Reasons for Decision of the Honourable Justice M.H. Hollins _______________________________________________________ [ 1 ] Teamsters Canada Rail Conference (the Union) seeks judicial review of a decision of Arbitrator John Moreau from October 12, 2021.

In that Award, he identified the specific employees who were entitled to benefits arising from an operational change made by Canadian Pacific Railway Company, now Canadian Pacific Kansas City Railway (the Company). [ 2 ] A previous Arbitrator, John Stout, had directed the Company to give formal notice of its decision to transition from one car sorting system to another (the “Transition”), finding that it constituted a “material change” in working conditions as that term was used in the relevant Collective Agreements.

[ 3 ] Thereafter, Arbitrator Moreau was appointed to assess the impacts of the Company’s Transition and to identify measures to be taken to minimize the adverse impacts of the change on the affected employees. Arbitrator Moreau took a list of employees identified in Arbitrator Stout’s Award as illustrative of the impacts of the Transition and used that as a comprehensive list.

He then went on to award various benefits to those, and only those, employees. [ 4 ] The Union has applied for judicial review of that decision, saying that Arbitrator Moreau was wrong to limit his Award to the list of employees identified in Arbitrator Stout’s Award, at least without some coherent explanation of why he was doing so.

The Company says that Arbitrator Moreau got it right, as did Arbitrator Stout, in addressing only the employees listed because there was insufficient evidence to include additional employees. [ 5 ] For the reasons that follow, I allow the application for judicial review, quash the decision of Arbitrator Moreau and remit the matter back for another arbitration on the first issue listed in the Joint Statement of Issues presented to Arbitrator Moreau.

Standard of Review [ 6 ] Both parties agree that the standard of review for this decision is reasonableness, as is presumptively the case; Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 at para.10. [ 7 ] Although the Company and Union agree on the test, they disagree on whether Arbitrator Moreau’s decision meets that test. As in most judicial review applications, one side emphasizes deference to the decision-maker and the other the requirement for a robust review.

The balance between these approaches is reflected in the language of the majority reasons: Reasonableness review is an approach meant to ensure that courts intervene in administrative matters only where it is truly necessary to do so in order to safeguard the legality, rationality and fairness of the administrative process. It finds its starting point in the principle of judicial restraint and demonstrates a respect for the distinct role of administrative decision makers. However, it is not a “rubber- stamping” process or a means of sheltering administrative decision makers from accountability.

It remains a robust form of review. Vavilov , at para.13 [ 8 ] The recent case of Justice Carruthers of this Court, which involved the same parties as this case but a completely different grievance, summarized a number of principles from Vavilov . The paraphrased list, which I adopt, is as follows: 1. Administrative decision makers are entitled to deference, but this does not mean that the courts are to rubber stamp decisions. Administrative decision makers are accountable and must demonstrate that their exercise of the power delegated to them is justified, in terms of rationality and fairness. 2.

Reasonableness does not mean blind deference. For example, decision makers are not entitled to ignore existing jurisprudence without explanation (see United Nurses of Alberta v Alberta Health Services, 2019 ABQB 255 , para 59 ). 3. Before a decision can be set aside, a reviewer must be satisfied that there are sufficiently serious shortcomings in the decision which are sufficiently central or significant to render the decision unreasonable. 4. The court is to consider both the outcome of the decision and the reasoning process the decision maker used to arrive at the outcome.

The focus is on the decision the administrative decision maker has made, including the justification offered for it and whether that is reasonable, not whether it is correct or whether it is the same decision the reviewing judge would have made. 5. Reasons explain how and why a decision was made, show the parties that their arguments have been considered, and demonstrate the decision was made in a fair and lawful manner. Reasons shield against arbitrariness. 6.

A reasonable decision is one based on an internally coherent and rational chain of analysis and which is justified in relation to the facts and law that constrain the decision maker. 7. While not required to respond to every argument put forward by the parties, an administrative decision maker's failure to address key issues or central arguments may call into question whether the decision maker heard and considered the parties' submissions. This underlies the duty of procedural fairness and the right to be heard.

Canadian Pacific Railway v Teamsters Canada Rail Conference Maintenance of Way Employees Division , 2023 ABKB 454 at para. 24 . [ 9 ] In this case, I am primarily concerned with the sufficiency of reasons and whether I can find a transparent and rational path to Arbitrator Moreau’s decision to limit compensation to the list of employees used as examples of the impacts of the Transition.

We now have the benefit of several post- Vavilov cases dealing specifically with the analysis of sufficiency of reasons, including a recent case of our Court of Appeal. [ 10 ] In International Brotherhood of Boilermakers v Alberta Labour Relations Board , there was a dispute about whether the union had established evidence of interference with union representatives by the company sufficient to survive a

summary dismissal motion by the employer. Ultimately, the Court found that the Board’s reasons were not sufficient to underpin a reasonable decision. In explaining its approach, the Court said: The principles of justification and transparency require that reasons be responsive to the central issues and concerns raised by the parties. These principles are related to the duty of procedural fairness and the right to be heard. Reasons are the primary mechanism by which decision makers demonstrate that they have listened to the parties: Vavilov at para 127 . In conducting a reasonableness review, this Court must consider the Board's reasoning process and outcome in light of its underlying

rationale in order to ensure the decision as a whole is transparent, intelligible and justified. This Court must also read the reasons considering the history and context of the proceedings. We must pay respectful attention to the reasons and seek to understand the reasoning process followed by the Board to arrive at its conclusion and cannot focus on the conclusion this Court itself would have reached: Vavilov at paras 15, 83, 94 . A reasonable decision is one that is based on an internally coherent and rational chain of analysis that is justified in relation to the facts and law...

International Brotherhood of Boilermakers v Alberta Labour Relations Board , 2022 ABCA 139 at paras. 24-26 . [ 11 ] I agree with the Union that Arbitrator Moreau’s decision was not reasonable, within the meaning of Vavilov . This is not because I agree or disagree with what was decided but because there is literally no path available to understand his disparate treatment of the allegedly affected employees. Reasonable justification for this might have been available, but without some indication of his rationale, the decision cannot stand.

The Prior Arbitrations [ 12 ] Because a review of Arbitrator Moreau’s decision requires an understanding of how he treated the previous findings of Arbitrator Stout, I will elaborate on what happened in the course of these two arbitration proceedings. [ 13 ] As mentioned, in late spring of 2012, the Company made a decision to switch from one type of car sorting system (hump classification in which rail cars were pushed up small hills, uncoupled and then simply rolled down the hill to the designated track) to a flat switching system (self-explanatory) for the sake of efficiency.

The Transition was implemented in stages over a number of months into the fall of 2012. A number of positions or assignments in the hump system were made obsolete by this Transition. [ 14 ] The Union initiated two grievances, one for its Calgary employees and one for its Winnipeg employees. At that time, they were governed by separate Collective Agreements although those were later consolidated. [ 15 ] The Union took the position that the Transition was a “material change” under the Collective Agreements, from which flowed the obligation to give formal notice of the change.

The Company took the position that there was no material change and no adverse effects to eligible employees. The Stout Arbitration [ 16 ] The question of whether the Transition was a material change was arbitrated by John Stout.

In his Award dated June 27, 2017, he agreed with the Union that the Transition and the resulting elimination of jobs was a “material change” which triggered the notice requirements for the Company under the respective Collective Agreements. [ 17 ] Although the parties had been unable to draft a Joint Statement of Issues for Arbitrator Stout, he described the issue before him as follows at paragraph 44 of his Award: “The issue to be decided in this matter is whether the events giving rise to these grievances, the discontinuance of hump operations in Calgary (Alyth) and Winnipeg, can be characterized as material changes under the Collective Agreements” [ 18 ] The Union argued that the material change was evidenced both by the fact that positions had been eliminated and also by reference to the impact on individual employees.

In its Brief filed for the Stout Arbitration, the Union provided lists and charts of positions affected by the Transition. The parties did not agree on the number of layoffs that resulted from the Transition.

Arbitrator Stout’s decision notes that the Union said a total of 95 people had been laid off and the Company’s figure was 79 (although the Company said none of them had enough seniority to be eligible for benefits in any event). [ 19 ] In addition to the lists and charts provided by the Union to track the elimination of positions, the Union also included lists of individual employees in Calgary and Winnipeg who had been laid off or moved to other positions as a result.

These lists were presented to Arbitrator Stout expressly as “examples” of employees so affected. [ 20 ] Arbitrator Stout seems to have been clear on this. At paragraph 30 of his Award, he says “The Union provided specific examples of Calgary employees who they insist were adversely affected...” [emphasis added], followed by a reproduction of that list which included the names of 8 Calgary employees and the changes in their positions following the Transition.

A similar list of 9 Winnipeg employees was also reproduced at paragraph 33 of the Stout Award, again described by Arbitrator Stout as being “specific examples”. [ 21 ] Indeed, this is the only logical use to be made of the list of examples, given the disparity in numbers as between the parties. The list of examples includes only 17 employees while, even on the Company’s numbers, there were dozens of employees arguably impacted. [1] [ 22 ] Arbitrator Stout went on to review the definition of “material change” in

Article 34.01 in one Collective Agreement (“material changes in working conditions which are to be initiated solely by the Company and would have significantly adverse effects on Engineers...”) and

Article 72.01 in the other Collective Agreement (“any material change in working conditions that will have materially adverse effects on employees...”). [ 23 ] He also spoke of the rationale for identifying material changes in working conditions, namely to “provide a process for notification and negotiations relating to Company initiated changes”; para. 40 of the Stout Award. At paragraph 46, he concluded:

“I am of the view that the Union has clearly established a prima facie case. The evidence submitted in these proceedings demonstrates that the Company’s change, discontinuing hump operations and changing to flat switching, had significant adverse effects. In this regard, I find that the change constitutes a material change under the Collective Agreements.” [ 24 ] It should be noted that Arbitrator Stout does not say how much weight he gave to the organizational information regarding the elimination or reclassification of positions as opposed to the evidence about the specific employees used as examples.

As will be discussed again later, this is presumably because he was not required to do so. His was a threshold issue for which he only had to find, and only did find, a “ prima facie case”; para. 46 of the Stout Award. [ 25 ] Given that the Transition was complete long before the issue of the notice requirement was decided, Arbitrator Stout directed the parties to address the proper remedial measures to be taken and to return to him if they could not agree. [ 26 ] The parties attempted to negotiate for some years but did not reach resolution.

The Company issued a material change notice as directed but within that notice, maintained that there were no resulting adverse effects. The Union argued that the notice was non- compliant and seems to have been insisting that the Company re-issue the notice in a form that contained the concessions it wanted, in terms of the Stout Award.

In the Union’s view, Arbitrator Stout had found material adverse effects and therefore the Company could not take the position that there were none. [ 27 ] Further, the Union took the position that it was the Company’s responsibility to identify the employees individually affected. The Company maintained that the Union should provide that information. Apparently, the Union eventually did so but perhaps not surprisingly, that did not move matters to resolution. [ 28 ] After some years of negotiation on this point, the parties resigned themselves to returning to arbitration.

Arbitrator Stout decided that he was not seized and so Arbitrator Moreau was appointed for the second arbitration. The Moreau Arbitration [ 29 ] This time, the parties did provide a Joint Statement of Issues. Of the list provided, the only issue material to this review is expressed as follows (verbatim): 1. Confirmation of Adverse Effects Union ° Arbitrator Stout has already determined employees were adversely affected ° Res judicata – the Company cannot re-litigate the adverse effects that was [sic] determined by Arbitrator Stout. The Company is bound by the Arbitrator’s award and findings.

Company ° Confirmation that adverse effects are limited to Car Retarder Operator positions. ° Obiter dictum – Arbitrator Stout opined on adverse effects; however his comments cannot be taken as final determination as this matter is at Arbitration under

Article 110.07. ° Without prejudice or precedent to the foregoing, should adverse effects be found by the Arbitrator, that measures to minimize these adverse effects should not apply to adverse effects caused by other changes including by [sic] not limited to implementation of RCLS at Alyth/Winnipeg, operating change related to Winnipeg to Thief River Falls, employees making seniority moves that result in bumping or displacements and changes in traffic volumes. [ 30 ] While the remaining issues before Arbitrator Moreau are not relevant to this review, it is perhaps worth noting that the other issues (#2-8) involved a determination of individual eligibility and then the treatment of particular benefits (lump sum payments, early separation allowances, relocation expenses, etc). [ 31 ] As is clear from the framing of the issue above, the parties disagreed about the extent to which Arbitrator Moreau was or was not bound by the findings of Arbitrator Stout.

The Company still wanted to argue that there were no adverse effects and the Union insisted that this had been a necessary factual finding for Arbitrator Stout’s conclusion on material change and therefore had to be accepted by Arbitrator Moreau. This disagreement about the application of the doctrine of res judicata was the primary dispute, not whether the employee list was exhaustive or not. [ 32 ] Unfortunately, it appears that Arbitrator Moreau may have misunderstood the scope of the Stout Award or, at least he has misstated it in my view.

At the outset of his decision, Arbitrator Moreau says that Arbitrator Stout found that the discontinuance of the hump operations amounted to a material change, which is a correct recitation.

However, he then says that “Arbitrator Stout went on to find that certain employees were adversely affected by the closure of hump operations and that the parties should engage in the negotiation process...in order to minimize the adverse effects...”; page 1 of the Moreau Award. [ 33 ] Respectfully, Arbitrator Stout’s references to specific employees did not follow his finding of material change but were in fact referred to him as evidence of a material change. Arbitrator Stout did not have, as part of his mandate, the identification of which individual employees should be compensated.

Further, based on the parties’ arguments to Arbitrator Moreau, the parties themselves did not appear to have any confusion about that. [ 34 ] Arbitrator Moreau, in view of the parties’ opposing views on res judicata , concluded that he should adopt Arbitrator Stout’s findings as a matter of principle. However, he then characterizes those findings as, inter alia , “that ‘several specific employees’ were

impacted by the closures....The list of those specific employees who were materially impacted in a negative way, according to Arbitrator Stout, is found at paragraphs 30 and 33 of his award.” [ 35 ] Even though Arbitrator Moreau then reproduces paragraphs 30 and 33 of the Stout Award, which clearly say these are “examples” of impacted employees, Arbitrator Moreau does not treat them as examples but rather as an exhaustive list.

His only explanation of this is on page 12: “In keeping with the principle of acceptance of the findings of the previous arbitrator on the same facts, I am in agreement with the Company’s position that Arbitrator Stout considered the submissions of the Union on the impact of the hump closures and limited his findings to the specifically named employees set out in the Union’s brief as being directly affected by the hump closures.

As the Company points out in its reply submission, the use of the word “several specific employees” (para.47) runs counter to the Union’s submission of the “vast impact” and “cascading effect” on the numerous positions that were directly affected by the hump closures.” [ 36 ] Arbitrator Stout did not limit his findings to the employees listed, as evidenced by his repeated use of the word “examples”, which word would be rendered meaningless on the Company’s (and Arbitrator Moreau’

s) interpretation. Further, Arbitrator Stout’s description of the issue before him was only to determine if there had been a material change triggering the notice requirements. Nowhere does he go, or purport to go, further to exhaustively identify or define who had been affected or how. [ 37 ] This error may also be traceable to Arbitrator Moreau’s description of the material before him as “substantially the same evidence” as was before Arbitrator Stout.

While that is obviously a relative term, there was an important difference in the evidence before the two arbitrators. [ 38 ] Before Arbitrator Stout, who only had to decide the threshold issue of material change, the Union’s material was focussed on the changes to the positions available following the Transition. The list of employees provided at that stage was, as discussed above, merely a list of “examples” of individual employees whose positions were impacted.

Before Arbitrator Moreau, whose mandate was to identify the specific impacts of the Transition and provide remedies where appropriate, the Union expanded its information on individual employees. [ 39 ] At paragraphs 102-107 of its Brief provided to Arbitrator Moreau, the Union explains the interplay between the numbers of positions affected and the individual employees affected, all of whom are listed in documents attached to the Union Brief at Tabs 18, 19, 20A and 20B.

There may have been legitimate complaints about how or when the Union provided that information but it was clearly before Arbitrator Moreau. [ 40 ] However, Arbitrator Moreau makes no reference to this evidence at all, even though that would seem necessary to delineating which listed employees were eligible for compensation and why. Arbitrator Moreau may have indeed agreed with the Company’s argument, also made to me, that there was insufficient evidence to include all the employees identified by the Union as having claims for compensation.

But he did not say there was insufficient evidence with respect to them – he simply did not address this evidence and treated the Stout list of “examples” as exhaustive. [ 41 ] His observation, at page 12, that the list of specific employees was incongruous with the Union’s description of “vast impacts” may be true but the simple and logical explanation for that discrepancy is that the original list of examples was never intended to be a measure of the breadth of the impact or the actual numbers of employees affected. [ 42 ] Even Arbitrator Moreau identifies that many more employees were said to have been laid off than the number on the “examples” lists, regardless of whether the Company’s figures or the Union’s figures were used.

Not only does Arbitrator Moreau not resolve that discrepancy, which would seem to have been part of his task, he never explains why only a few of the dozens of employees laid off were eligible for recompense. [ 43 ] I agree with counsel for the Union that it would be difficult to explain to its members why some of them received compensation while others, in the same or comparable circumstances, did not.

Again, there may exist an explanation (for example, that the positions of two different employees were not in fact comparable or that only one of them suffered impacts eligible for recompense) but no explanation is offered. [ 44 ] I am not saying that the dozens of employees listed at Tabs 18-20 of the Union Moreau Brief are entitled to compensation. I am saying that without some explanation, it cannot be reasonable to compensate a random sampling expressly identified as “examples” and exclude all others. [ 45 ] I refer again to the Alberta Court of Appeal’s decision in International Brotherhood of Boilermakers .

Although the issues were unique to those parties, the Court set out the Union’s argument and makes the point that it was simply not addressed by the Board in a way that allowed for meaningful review: [The employer’s]

summary dismissal application put two of these elements in issue: (1) whether there was a negative action (intimidation, dismissal, threats, penalty, or similar action); and (2) whether any negative action was done for the purpose of compelling an employee not to be a member, officer or representative of the Union. In response, the Union submitted the Board could draw inferences from the numerous pleadings and particulars to support both disputed elements.

Further, the Union provided authorities stating the third element focuses on the intention behind the employer's acts, not their effectiveness, and can be established by anti-union animus or a pattern of anti-union activity. None of these arguments were addressed by the Board. The Board's failure to meaningfully grapple with key issues or central arguments raised by the parties calls into question whether it was alert and sensitive to the matters before it: Vavilov at para 128 . ...

A decision is unreasonable if the reasons read in conjunction with the record do not make it possible to understand the Board's reasoning on a critical point: Vavilov at para 103 . That is the situation here. We are unable to discern the basis on which the Board's decision was made. International Brotherhood of Boilermakers , supra , at paras. 30-32, 35 . [ 46 ] I am in no position to say which employees should be compensated for the adverse impacts of the Transition, nor was I asked to. It may be that a more careful analysis of the comprehensive list of employees will end up including all, none or some of them.

However, it is not possible on this record to justify the decision of Arbitrator Moreau to adopt an illustrative list of examples as being comprehensive with no explanation.

Conclusion [ 47 ] As the reasons of Arbitrator Moreau fail to address the central arguments of the parties, as well as the evidence, on precisely which employees were eligible for benefits and contain no discernible pathway to his conclusion to include some employees and exclude others, the decision of Arbitrator Moreau is hereby quashed. [ 48 ] It is my understanding that Arbitrator Moreau is no longer available so a new Arbitrator will need to be selected to rehear this matter.

Unless the parties say otherwise, the only matter remitted is Issue #1 as described in the Joint Statement of Issues. [ 49 ] If the parties cannot agree on costs of this application, they may contact my office and make arrangements for brief written submissions thereon. Heard on the 19 th day of October, 2023. Dated at the City of Calgary, Alberta this 6 th day of November, 2023. M.H. Hollins J.C.K.B.A. Appearances: Ken Stuebing for the Applicant, Teamsters Canada Rail Conference Andrew Dixon for the Respondent, Canadian Pacific Railway Company